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irs offshore accounts, San Jose tax law attorneyThe IRS has announced that it has received nearly $10 billion as part of a special program offered to taxpayers who were shielding assets in undisclosed offshore accounts. The $10 billion dollars was paid by 55,000 taxpayers who utilized the Offshore Voluntary Disclosure Program (OVDP). This sum includes taxes, interest, and penalties.

The OVDP is offered to those with undisclosed income from foreign financial accounts and assets and allows them to come into compliance with tax returns and report obligations. The program incentivizes taxpayers to voluntarily disclose these assets before the IRS finds out about them later. If the IRS discovers that an offshore account has not been disclosed, more severe penalties and possible criminal prosecution can result.

Similar to the OVDP, taxpayers have used a second program called the Streamlined Offshore Disclosure Program to pay approximately $450 million in taxes, interest, and penalties.

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Posted on in IRS Scams

irs tax scam, san jose tax law attorneyScammers have long pretended to be the IRS in order to prey on taxpayers in the hopes of scaring them into paying hundreds or thousands of dollars. In reaction to this, the IRS warns consumers of these scams, which take on many forms. 

Recently, there has been an uptick in IRS scams coming from India. One 29-year-old woman, who ultimately gave into the scammer’s request for money, said that the person who called her had a foreign accent and confused basic English phrases. 

Twice in the conversation, the scam victim said the person on the phone said she owed 1,000 rupees, which is the currency used in India. Both times he corrected himself and said she owed $1,000.

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Posted on in IRS Scams

Each year, IRS puts out a series of press releases warning taxpayers of twelve schemes they call the "Dirty Dozen." The items on the list can change from year to year, and several typically have to do with taxpayers attempts to game the system by understating income, overstating deductions, engaging in "tax shelter" transactions, and so forth.

But for the past several years, the top three items on the list have been identity theft, phone scams, and phishing schemes - situations in which ordinary people are vulnerable simply because they are trying to comply with the tax laws.

Each year IRS identifies literally millions of returns in which a thief has used someone else's Social Security number to claim refunds. While the agency says it is making progress in detecting and preventing identity theft, "criminals continue to look for increasingly sophisticated ways to breach the tax system," including phishing and phone scams.

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Tagged in: IRS Tax Scam

Privacy and the sharing of personal information have many concerned when being contacted by a caller stating that they represent the IRS. Per John Dalrymple, Deputy Commissioner for Services and Enforcement: "We are evaluating our contacts with taxpayers, outside of the examination context, to determine whether they present risks with respect to phone scams and other such threats."

The new changes will mitigate any risk taxpayers may take when providing personal information over the phone. Deputy Commissioner Dalrymple, stated the policy change clearly in his memo, dated May 20, 2016, "Effective immediately, all initial contacts with taxpayers to commence and examination must be made by mail, instead of the telephone, using the appropriate initial contact letters."

Implementing written correspondence as the initial contact in case examination will establish the validity of the communication received by the taxpayer. The Deputy Commissioner elaborates on the new policy change throughout the memo, indicating the following:"Employees will use the appropriate initial contact letters listed in the Internal Revenue Manual ( IRM ) to notify a taxpayer when a return is selected for examination, and will not make initial contact by telephone."

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The IRS has implemented a new policy relating to the means its agents must use to initiate contact with taxpayers. Effective immediately, when an IRS agent contacts you for the first time, that contact must be via a mailed notice.

Although a follow-up contact may be made by telephone (but not any sooner than 14 days after the initial letter is sent), it is required that any taxpayer selected for an examination (also known as an audit) be notified of this fact via mailed letter.

This action has been taken by the IRS, at least in part, due to the proliferation of telephone scams wherein scammers pretending to be IRS agents contact unsuspecting taxpayers and attempt to obtain personal information, financial information, and even payments.

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